In this interview series on inspiring digital technology leaders, we take an inside look at how enterprise technology leaders make systems work in some of the largest and most complex business environments in the world. Meet the Individual, Understand their Challenges, and learn about Their Vision of the Future.

An Interview with Alexander Haege

Introduction

The pace of technology innovation today is staggering. It is hard to keep up with the breadth, depth, and speed of change of new technology, and the new business model opportunities this brings. In this interview we hear about about innovation driving Digital transformation and how investing in real innovation for your technology and business is more effective long term than simply optimising what you already have, as well as how easy it is to let bureaucracy ruin a great idea and opportunity— to the tune of €10m–€100m per year in new revenues — Ouch! Too often we see Digital Transformation programmes simply replacing existing processes, applications, services, with something essentially the same, just slightly updated tech that is web native. We should ask ourselves honestly if some of these (usually expensive) projects could be replaced with something that truly innovates on the entire business proposition and underpinning capability.

Alex is an innovative technology executive with experience helping large complicated organisations transform their enterprise systems and business models, as well as leveraging new market trends, business model strategies, and startup investment to help drive innovation. Alex’s background working in large management consultancies, such as IBM, KPMG, and Lufthansa, and his experience with technology and business architecture have helped create a strong understanding of the industry challenges and how best to apply new innovations in technology and business models in real world scenarios to revitalise traditional enterprises. Alex and his company are looking for innovators in the logistics and mobility space — get involved here: http://beyond1435.com/

Bitesize Takeaways:

Success starts with having a clear strategy and a shared goal
Enterprises will not be single standalone systems anymore
Contracts need to be fast and dynamic
Traditional business will continue to be disrupted by tech savvy enterprises
The challenge is to create a truly dynamic & flexible architecture
Prepare for the age of sensors, connected machines and lots of data
There’s a big market for selling comprehensive and enriched data
Use a 2–3 year roadmap to get things done in a comprehensible timeframe
If everyone says it is not possible, be the one who does it anyway…
Complex enterprises struggle to achieve a well-structured IT architecture
Great solutions come from aligning: team + customers + tech trends
Create an environment where people feel able to make an impact
Provide a balance of freedom and structured guidance
Large enterprises lazily opt for easier cost reduction, over real innovation
We expect far too much from the initial release of a new product
Organisations are building the same things again and again
Democracy in the solution design & delivery process has its price
Following every customer wish will lead to unmanageable complexity
Politics drive poor solutions, create frustration, and cost money
Successful enterprises are dedicated to building easy to use products

Meet the Individual

Q: Tell us a bit about what you currently do:

Head of Strategy & Innovation at one of the biggest family owned german recycling companies. My mission is to expand the current business models by identifying collaboration opportunities with StartUps across the globe and creating new digital business opportunities with other partners preferably in logistics and supply chain.

Q: What motivates and inspires you to get up and go to work every day?

The daily opportunity to challenge and create new innovation / ideas and technologies to be adapted to business operations every day … and the possibilities to talk to great technology leaders across the globe about latest developments and implementations in technology.

I’m also inspired by this quote: “Everyone said this is not possible. Then came the one who didn’t know that, and did it anyway”

Q: Tell us about your journey to get to where you are today?

My first personal computer experience was with Commodore 128 system and Basic programming language… I was 9 years old … later I decided to study economic computer science as I was always interested to learn more about technology innovations, but also how to adapt those to the real business environment … my work career started in the late 90s and I started to work as a Consultant and learned a lot about enterprise technologies, processes and architecture topics. I had the chance to be part of huge (what you would call today) “digital transformation programmes” with blue-chip companies in various verticals, such as automotive, banking and general industries and logistics).

What I really learned was how hard it is to implement a well-structured and organized IT architecture into a big and complex enterprise organization. This was also the time when I wanted to further dive into Enterprise Architecture topics and created enterprise architecture and IT process blueprints based on common enterprise architecture methodologies. I worked about 8 years in this space and together with a former colleague I wrote a paper regarding business oriented architecture management. We have especially analyzed how to achieve highest business value, successful implementation strategies and respective organization needs for a great enterprise architecture strategy. That was 10 years ago and I think we were idealistic dreamers. But I still think what we have analyzed and issued together with well-respected distinguished IBM engineers is still true. After joining a enterprise transformation project for one of the largest global logistics forwarding company I was moving further and wanted to better understand how business really works and what the barriers and boundaries are and decided to work for the largest European airline and focused even more on logistics / airfreight challenges.

I had the great chance to lead business teams and even to really transform business processes in a harsh operations environment. That was extremely valuable in order to understand the gap of technology innovations and the barriers for adopting those great innovations in a real business operations organization with “hardcoded” processes. I led a project together with 20 team members in order to re-arrange steering and planning process of outbound logistics for the largest German airfreight operations at Frankfurt airport. We restructured the complete business process, but still we found a lot of challenges and business potentials. So I came up with the idea to push the boundaries and combined technology knowledge with the business process insights. Finally we built a completely new digital freight planning solution for airfreight industry, which I would say is a real technology innovation due to its flexibility in using it mobile anywhere and anytime, which is really important for logistics industry. We used latest depth sensing technologies, augmented reality features, mobile devices and pushed software, especially tracking algorithms to their technical limits. That was extremely fun to make that happen and to see how the pilot was able to deliver what we expected — to measure freight pallets in a mobile environment in real time. As this was a completely new way of measuring freight the company filed my invention as a patent. Although the pilot was a great success and voted as one of the digital innovations, it hasn’t been rolled out on a bigger scale yet. But I am very sure to see our developed technology in logistics implemented very soon and rolled out in the industry.

Q: If you were to do anything other than what you do now, what would it be?

SpaceX or NASA would be really interesting organisations, because it is really exciting that humans will travel to Mars in the not so distant future, and that is going to be a fantastic journey

Understanding Their Challenges

Q: What do you personally spend most of your time dealing with?

It is a mixture of listening to the needs of people in my team / organisation, customer/market expectations and current development of innovations / technologies. I think the key is to align those three in order to develop great solutions as you need an in depth understanding of challenges and customer needs as well as current development of technologies but also a best in class team to deliver. If it is possible to achieve this alignment, that becomes the foundation for great Enterprise strategy and architecture.

Q: What is the most important thing you focus on to make the organisation successful?

First — Get things started: That means to create an environment where people feel able to make an impact with what they are doing. Providing a mixture of enough freedom on one hand and guidance on the other to enable the team based on experience but also leave room for their own creativity.

Second — Get things done: Often many projects struggle to get finished. There is a lot of euphoria in the beginning. But teams soon experience barriers and many project or team members tend to withdraw themselves before the next critical situations arise. So I think it is critical to focus everyone on one common goal right from the start (either strategic development of the organisation or project goal). It is important to write down and formalise those goals and to spread them to the key players in the organisation. When the team is up and running it is essential to get more people on board to support the same goals. In the last phase my experience is to stay focused and push the project to the finish line, especially if the topic is something new for the organisation.

Q: What are the most expensive mistakes you have seen made in organisations, and how did they happen?

The most expensive mistake I have seen was not leading to additional cost, but to unrealized revenue. No risk was taken to make the decision. The organization had the chance to “easily” earn additional yearly revenue of 10–100 M€ on a yearly basis. But unfortunately the decision making process was not moving forward, even though the employees and the board wanted to implement the solution. It was the middle management who blocked the implementation as they felt it was too risky for them and could lead to loss of their jobs, as it would be very transparent that they really weren’t doing well over the past years. For many bigger organizations it is easier to focus on cost programs than taking the risks of implementing innovations. And the expectations for new products or process innovations are often far too high in the beginning and people do not focus on implementing those in the right manner anymore.

Q: What drives the complexity in your Enterprise Systems?

Very often I see a complete misalignment between the expectations (or knowledge) of people responsible for business operations and the potential of business applications. But also customer expectations can vary a lot and IT applications are sometimes not meeting expectations regarding such flexibility. This leads to additional application modules, databases or additional implementations which in the end makes everything too complex. Maybe the process in some enterprises is too “democratic” or possibly decisions are just not followed.

Q: What are the most frustrating challenges when designing, building and managing enterprise systems?

When it comes to Architecture: A lot of the work is theoretical process or concept work and is not something that can be really experienced through human senses. It can be frustrating because many managers make hasty decisions without looking in detail behind the scenes and therefore don’t have the ability to really evaluate the implications or potential of the system.

When it comes to Applications: A lot of double work is being done in organizations building the same things again and again in slightly different ways, creating a lot of extra effort and cost. Whilst at the same time, much of the team’s potential is unused because managing the complexity of the entire product / solution development process is very difficult.

Q: What has most helped to drive the success of your change programmes?

Dedication of the people to “their” process and the will to make their own life much better. You need to have dedicated people in your project to drive things forward. But it is also essential to have a good mixture of “structured” concept oriented people and people moving forwards with less structure in the same team. It is really about the mindset of the team in the end. The people involved in the project need to be appropriate for that type of work compared to the people involved in the daily process. It is also extremely important to have some change agents accepted in the organization in order to really get acceptance for the upcoming changes. And keep an eye on very small changes (e.g. small functional changes) as people tend to focus their attention on the “small things”.

Q: What has most negatively impacted your change programmes?

It is very hard to really involve everyone especially in big change programs. I was leading a transformation program, which was impacting about 800–1000 people … this means you not just have to keep an eye on optimizing the process and making life easier for the business organization but there is also a lot of politics going on e.g. between (Germany’s) works council and middle management … It was a tough path to understand the politics and different interests and I found that it is not always about delivering great solutions for the people. It was really interesting to see how opinions can change quickly behind closed doors and people ask you not to be too frustrated about what’s going on, in public. I think this is happening everyday in big companies.

Q: What is currently holding you back from having the tech/engineering credibility of a Google/Facebook/Amazon?

For me it is really about the focus and dedication of what those companies are doing. They all have invented great consumer products which are easy to understand and have great value for their customers. Around their product they have built an extremely efficient and customer oriented process in order to approach their products. Sometimes organizations have a pretty broad and complex customer portfolio. And it is much harder to build customer access channels for complex portfolios. So I think it really starts with having a clear strategy and core portfolio of products and services the customers sees great value in using. If you get this right you can build innovative products and services around this. I think companies like Deutsche Bahn is currently doing a great a job on enhancing their core products and services but also expanding the portfolio boundaries further into new digital business areas/products that are very structured and dedicated. So they are really preparing for the new age of mobility and logistics.

Their Vision for the Future

Q: What are the 3 key changes that Technology Leaders should focus on in the modern world?

Be specific in terms of technologies and how they can be adapted to certain challenges, but do not forget to spread your portfolio of starting projects / new business models and expect and prepare that some initiatives will fail
Try to identify and focus on the technology innovations to drive revenue with new or revised business models instead of endless optimisation of the same issues
Set up a 2–3 year roadmap to get things started and finished in a comprehensible timeframe

Q: What is one thing about the future of technology that you believe in, but most people generally don’t know, or disagree with?

Prepare for technology with huge impacts (e.g. autonomous driving & e-mobility, artificial intelligence, and blockchain with smart contracts) to arrive much faster than people believe. This will surprise a lot people in the next 5 years. I do see a lot of StartUps and innovative organisations especially in mobility and logistics driving forward this change with a dramatic speed at the moment. Especially in Blockchain the guys developing those techs/algorithms make a tremendous amount of money at the moment and only a very few understand how. We are in moving towards a phase of adopting those technology innovations in the real world. E.g. integration of AI tools in daily life. And it is changing the future much more than any tech innovation in the past. The problem is, many do not understand the business models behind this anymore, because they are much more complex and you need a deeper understanding of algorithms and programming to control / influence them.

Q: How can we build better technology organisations?

For me you need organisations designed a bit like german highways. You need traditional lanes, where traffic can move on with the same speed and without overtaking. You need a middle lane, where more flexibility is allowed and specific technology adoptions are essential for success. And third you need a high speed lane without any limits regarding speed and power. Additionally, today, you need a restricted test area for the super innovative technology implementations without any connection to the normal traffic. If the tests are successful you can bring them to the highway.

Q: What do Enterprise Systems of the future look like?

Enterprises will not be single standalone systems anymore. I believe there will be much more cooperation of two or even more enterprises to get new business models up and running. This also means more open source technologies. Of course even today enterprises and their systems are connected already and aligned in terms of processes or supply chains. But due to new technology inventions like some blockchain implementations (smart contracts) the peer to peer communication will be eliminated and changed to a kind of flexible and dynamic systems where organisations work together across industries and trying to provide best in class integrated processes together. Information as certificates can be shared across organisations with full trust and encryption capabilities. The implication is that contracts will not be static anymore but very dynamic and organisations who have no “real” products will be easy to be bypassed by others.
Enterprises with a lot of technology know how and experience will enter traditional business models, as the customer expectations have changed over the past ten years in many areas. Challenges for the technology are to create that dynamic and flexible architecture or even open source technologies to ensure interactive communication at a very low cost. I have seen first of those technologies e.g. for machine to machine communications / transactions. All business needs to prepare for the age of sensors and machines and how to profit from those new digital information available everywhere and anytime.
Enterprise business models will be much more focused on making money with adjusting and selling comprehensive information for their industry. Especially in logistics already a lot of StartUps entered the market by just by putting together information from the logistics provider delivering those information during the supply chain. The funny thing is they sell this information to their customers as if they have produced the data but actually someone else did and they just make the information visible across the whole supply chain and bring a lot of value to the customer by doing this. There will be more business models like this in the tech world in the future and organisations need to put intelligent strategies and architectures together to stay ahead.

Alex and his company are part of an innovation group focused on mobility and logistics, and are looking for great startups and technologies in this area to join their innovation accelerator: http://beyond1435.com/

Alex kindly provided his time, knowledge and insights in this interview as part of my research for an up-coming book: Mastering Digital: how technology leaders, architects, and engineers build the Digital Enterprises of the Future

You can contact Alex on LinkedIn.